Becoming an Investor
Why invest in a venture capital trust (VCT)?
VCTs offer two main advantages over other investment products in the market. First, the structure of a VCT provides investors with a combination of tax advantages unmatched by any other kind of investment product in the UK. Second, VCTs offer investors the opportunity to enjoy the higher returns that typically come from investing in UK smaller companies.
Tax Benefits
You will receive 30% upfront income tax relief on your VCT investment provided you hold your shares for five years. This means that if you invest £10,000 in a VCT, your income tax bill for the current tax year will be reduced by £3,000. Your investment of £10,000 therefore only costs you £7,000, providing you with an effective return after initial costs of 35% before the Fund makes its first investments.
Investment Manager
The Fund will be managed by the team at Octopus Ventures, who have an excellent track record of making investments into early stage unquoted companies over the last ten years.
Investment Policy
The Fund will focus on providing early stage, development and expansion funding to unquoted companies with a typical deal size of £0.5 million to £2 million. It is expected that the portfolio of holdings that will be built by Octopus Titan VCT 3 will encompass investments in 20-25 unquoted companies (assuming full subscription under the Offer), with a focus on the environmental, technology, media, telecoms and consumer lifestyle and wellbeing sectors. It is envisaged that, at the end of the three year initial investment period, 75-85% of the proceeds of the Offer will be invested in a range of Qualifying Investments with 15–25% invested in a combination of cash, money market securities and OEICs managed by Octopus. Octopus Titan 3 will not borrow money for the purpose of making investments.
Service
Investors are kept as involved and informed throughout the investment process as they want to be. As well as receiving regular investment updates, investors are invited to regional investment seminars that are held and are encouraged to speak directly to one of the fund managers who are investing their money.
Category of Investor
A typical investor for whom the Offer is designed is a UK income tax payer over 18 years of age with an investment range of between £3,000 and £200,000 who, having regard to the risk factors set out at the front of this document, considers the investment policy of the Fund to be attractive. This may include retail, institutional and sophisticated investors and high net worth individuals who may already have a portfolio of non-VCT investments.
How to Invest
Please click on the prospectus on the right of this page. An application form is attached at the end of this prospectus. The minimum investment is £3,000. Although there is no maximum size of investment, tax reliefs are available on a maximum VCT investment of £200,000 per individual in any one tax year.
Key Risk Factors
Although the significant tax benefits available to investors in Octopus Titan 3 reduce the risk of the investment, there are a number of key risk factors of which investors should be aware:
- There can be no guarantee that Octopus Titan 3 will qualify as a VCT or that such status will be maintained which could lead to adverse tax consequences for investors, including a requirement to repay the 30% income tax relief.
- Investors may find it difficult to realise their investment in Octopus Titan 3 and the price at which the Ordinary Shares are traded may not reflect the net asset value of the Fund.
- There can be no assurances that Octopus Titan 3 will meet their objectives, identify suitable investment opportunities or be able to diversify their portfolios. Please remember that past performance of Octopus Ventures is no guide to future performance and that the value of an investment into Octopus Titan 3 may fall as well as rise and an investor may not receive back the full amount invested.
- Investments made by Octopus Titan 3 will be in companies which have a higher risk profile than larger “blue chip” companies and whose shares are not readily marketable and therefore may be difficult to realise.